The attempted resuscitation of Uchumi Supermarkets has proven to be futile time after time. Kenblest Group and Githunguri Dairy (known for Fresha milk product), are now among three creditors seeking to have Uchumi liquidated, bringing the petition’s total claims in the suit to Sh215 million.
Kenblest Group wants its wheat flour firm Mcneel Miller receiving a compensation value of shs. 52.7 million while bread maker Kenblest Limited is demanding Sh.6.1 million. Githunguri Dairy Farmers Co-operative Society’s demand is the highest in the suit. It seeks to have Sh99 million recovered from the liquidation of Uchumi. Insync claims it is owed Sh4.2 million. Both Kenblest Group and Githunguri Dairy plan on making the above quoted compensation figures the entry point to the suit.
Software developer Insync Solutions together with the above mentioned suppliers have filed an application in the High Court, seeking to be allowed to join the petition the liquidation of Uchumi, which currently owes its suppliers a total sum of over Sh3.6 billion.
“Take notice that Githunguri Dairy Farmers Co-operative Society, a creditor for Sh99, 001,088 intends to appear on the hearing of the petition to support it,” states Fresha’s application.
The High Court has opened the door for Uchumi’s creditors to either support or oppose the winding-up/liquidation petition.
“It would be against public interest to allow Uchumi to continue trading and accumulating insurmountable debts when it is incapable of paying its suppliers. If Uchumi continues to trade it will cripple other businesses, which supply stock and which have ongoing overheads and financial obligations that are dependent on Uchumi paying for goods and services received,” Mr Onsongo says while San Giorgio wants the High Court to appoint a provisional liquidator to begin the process of disposing of Uchumi’s assets in order to offset its debts.
Uchumi’s negative equity position has resulted from its total liabilities surpassing its assets by nearly Sh200 million. It’s debt adds up to Sh6.3 billion against a total asset base of Sh6.1 billion thus translating to a negative equity of Sh0.49 per share as per half-year financial statements to December.
Truth is, the turn around of Uchumi to profit making establishment seemed to have dwindled long time ago. A concise decision on the way forward needs to be established, all factors considered.